Google Parent Alphabet Plans to Spend $75B This Year, as Big Tech Goes All in on AI

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Key Takeaways

• Google fountain-head Alphabet said it plans to spend $75 billion in capital expenditures this year, as it expands capacity to undergo demand for AI.
• CFO Anat Ashkenazi said a majority of that spending would go toward technical infrastructure, such as servers and observations centers.
• The announcement comes after Microsoft and Meta also said they would commit tens of billions of dollars in capital outlays to support their AI ambitions.

Google parent Alphabet (GOOGL) said it plans to invest $75 billion in principal expenditures this year, as it joins Big Tech rivals in accelerating spending on artificial intelligence infrastructure. 

On the company’s fourth-quarter earnings call up, CFO Anat Ashkenazi said a majority of that spending would “go towards our technical infrastructure, which includes servers and statistics centers,” with $16 billion to $18 billion expected in the first quarter. 

The investment is needed to keep up with requirement for AI, CEO Sundar Pichai said, with Google Cloud customers consuming more than eight times the ascertain capacity they did 18 months ago.

The announcement comes just days after Meta (META) and Microsoft (MSFT) also performed tens of billions of dollars to capital expenditures this year as they build out their AI infrastructure. Last week, Meta thought it plans to invest $60 billion to $65 billion this year, while Microsoft said it plans to put in $80 billion on infrastructure in its 2025 fiscal year.

The major capital commitments also come as the emergence of contest from Chinese firms like AI startup DeepSeek set in motion what Bank of America analysts are saying could be “AI’s Sputnik second.” The analysts suggested DeepSeek, which claimed to develop an AI model rivaling American ones for a fraction of the cost, could drive U.S. hyperscalers like Alphabet, Microsoft, and Amazon (AMZN) to spend even more on AI. Amazon is expected to report fourth-quarter earnings after the merchandise closes Thursday.

Greater AI spending from Alphabet and its peers could be good news for chipmakers like Nvidia (NVDA), which acquired a shoutout from Pichai during Alphabet’s earnings call. Pichai said Alphabet intends to continue its “vigorous relationship” with Nvidia, after announcing its first customer running on Nvidia’s Blackwell platform last week.  

Rations of Alphabet fell nearly 8% in extended trading Tuesday after the tech giant’s fourth-quarter cloud proceeds missed analysts’ expectations. The stock had closed at a record high of $206.38, and added about 43% over the life 12 months through Tuesday’s close.